Punjab

Punjab, one of the northernmost states of India, is bordered by the Pakistani province of Punjab to its west, Jammu & Kashmir in the north, Himachal Pradesh in the northeast, Haryana in the south and southeast, and Rajasthan in the southwest.

The confluence of five rivers makes Punjab’s agricultural land rich and productive. Approximately, 82% of the state’s land is under cultivation, compared with the national average of 40%.

Punjab is known as the ‘Breadbasket of India’ and led to the first Green Revolution in the country. By 2026, it is expected that the state will be among the leading producers of non-food grains and an exporter of various agri-products.

The state provides investment opportunities in sectors such as textiles, agro-based industries, IT & ITeS, automotive and auto components, sports goods, and light engineering goods.

Punjab is the source of 95% of India’s woollen knitwear production, 85% of India’s sewing machine production, and 75% of India’s sports goods production.

Punjab’s road, rail and air transport network, connectivity, construction of bridges and infrastructure facilities are rated among the best in the country.

As of FY26 (Until August 2025), Punjab has a total installed power generation capacity of 14,667.35 MW, with 3,965.13 MW under the central sector, 3,281.20 MW under state utilities, and 6,881.02 MW under the private sector. Of the total installed power generation capacity, 8,364 MW was contributed by thermal power, 3,827.44 MW by hydropower, and 6,074.26 MW was generated from renewable energy.

The Punjab government has chosen to develop a super Energy Conservation Code (ECBC) compliant building in Mohali to encourage energy conservation and highlight the energy efficiency of buildings.

According to the Department for Promotion of Industry and Internal Trade (DPIIT), cumulative FDI inflow in the state stood at Rs. 9,839.44 crore (US$ 1,285.81 million) between October 2019-June 2025.

• Under the State Budget FY26:
  • Rs. 2,392 crore (US$ 269.73 million) has been allocated for transport of which Rs. 1,610 crore (US$ 181.55 million) has been allocated for roads and bridges.
  • Punjab has allocated 1% of its expenditure towards urban development. In 2023-24 Rs. 1,215 crore (US$ 137.01 million) was allocated for urban development.
  • Government has allocated Rs. 19,110 crore (US$ 2.15 billion) for school education. Of the total, the government allocated Rs. 4,248 crore (US$ 479.03 million) towards Government Primary Schools and allocated Rs. 8,727 crore (US$ 984.10 million) towards Government Secondary Schools.
  • A total allocation of Rs. 3,699 crore (US$ 417 million) has been designated for the urban health services - allopathy, while Rs. 632 crore (US$ 71.3 million) has been earmarked specifically for rural health services - allopathy.

Punjab has easy procedures to set up a business, according to a study by the World Bank and KPMG. Punjab had set up a Bureau of Investment Promotion (BIP) in December 2013 for one-stop clearance of investment proposals. BIP has powers to give approvals related to pollution control, excise and taxation, labour issues, factory licences, boiler registrations, town and country planning, land and power-related issues.

Punjab has emerged as a key hub for textile-based industries including yarn, readymade garments and hosiery. With the development of apparel parks, favourable textile policy and other incentives for the creation of textile infrastructure, the state offers numerous opportunities for investment.

Total merchandise exports from Punjab stood at Rs. 16,317 crore (US$ 1.84 billion) in FY25.

Engineering Goods, Rice, Drug and Pharmaceuticals, Cotton Yarn, Organic and inorganic chemicals and Meat, Dairy and Poultry products accounted for a majority share in the overall merchandise exports of the state.

Punjab's progressive horticulture model received praise for strengthening fruit and vegetable processing through new cold storages, value-addition centers, and agro-processing units which will support post-harvest management and improve returns for horticulture farmers.

In 2024, Punjab successfully exported litchis grown in 3,250 hectares, producing about 13,000 metric tons annually, marking a significant milestone opening international markets for Punjab's horticultural products.

Punjab’s IT policy and the incentives offered to the IT industry are aimed at promoting Punjab as an attractive destination for the IT industry. Mohali has been developed as an IT and ITeS hub in the state.